2005 - TSMC · 03 Environmental, Safety and Health annual report 2005 2005 was an encouraging year for TSMC. TSMC not only set the record of continuously making profits for 16 years,

2005Environmental, Safety and Health Annual Report

Continuous Growth and Corporate Sustainability

Taiwan Semiconductor Manufacturing Company Limited

1. This annual report covers ESH statistics of Fabs 2, 3, 5, 6, 7, 8, 12 and 14.

2. Comparing the ESH performance covered by this annual report with that of

other industries is not recommended.

3. This annual report is authorized by TSMC with all rights reserved.

01 Environmental, Safety and Health annual report 2005


1 . A Letter From the President

2 . Company Profile

3 . ESH Policies

4 . ESH Organization

5 . ESH Milestones

6 . Performance Index

7 .Environment Management

6 . 1 Dow Jones Sustainability Indexes (DJSI)

6 . 2 Awards

6 . 3 Environment Performance

6 . 3 . 1 Wastewater Treatment

6 . 3 . 2 Water Resource Recycling

6 . 3 . 3 Air Pollution Control

6 . 3 . 4 Energy Conservation

6 . 3 . 5 Waste Management and Resource Recycling

6 . 4 ESH Management System Certification

6 . 5 Occupational Injury/Illness Statistics

7 . 1 Environmental Accounting

7 . 2 Life Cycle Assessment

7 . 3 Green Procurement

7 . 4 Greenhouse Gas Emission Reduction

8 . 1 Emergency Response

8 . 2 Earthquake Preparedness

8 . 3 Contractor Management

8 . 4 Avian Flu Prevention Project

9 . 1 Safety Culture

9 . 2 Health Enhancement

9 . 3 ESH Activities

03

05

07

08

10

11

26

27

28

29

13

14

8 .Safety and Health Management

9 .Healthy and Well-being Work Environment

10.Social Responsibility Information

25

30

31

32

33

35

40

36

37

38

39

16

17

18

20

21

23

24

Contents


2005 was an encouraging year for TSMC. TSMC not only

set the record of continuously making profits for 16 years,

but our November monthly revenue also reached an all-time

high of NT$27.5 billion. In terms of technology, TSMC

innovated the use of immersion lithography that employs

water as the medium, which dominated 50% of the 90nm

1 A Letter From the President

wafer market, was successful in 65nm wafer trial production and has been introduced

into the 45nm process. In addition to the continuation of the corporate culture of "ICIC" -

"Integrity", "Customers Are Partners", "Innovation" and "Commitment" - technical staff

are required to understand marketing and customer services, to identify customers'

needs personally and to formulate customer satisfaction measurement indicators to

To ensure "continuous growth" and "corporate sustainability", TSMC fabs passed ESH

management system certifications in 1996 and 2000 in order to reduce the impact and

risk caused by production and related activities. In 2001, TSMC voluntarily committed to

reduce emission of PFCs and began to hold annual "Supply Chain Management

Forums" for suppliers and contractors to exchange their experiences and learning on

In 2004, along with our major material suppliers, TSMC participated in the "Green

Supply Chain Project" organized by the Bureau of Industrial Development. The purpose

of the project is to extend our green production efforts up- and down-stream and create

our competitiveness and our lead in the market.

production, environmental protection, safety and health.

a situation where TSMC, our customers and our suppliers all benefit.


1 A Letter From the President

Dr. Rick Tsai

President and CEO

May 2006

Furthermore, TSMC has spared no effort in our endeavor of safety and health

improvement. TSMC in recent years has continually established a new machinery seismic

protection system and a new chemical risk evaluation system, promoted employees'

home and commute safety, and initiated an extensive ergonomic engineering project and

the SARS prevention project. TSMC has also completed a series of anti-seismic

evaluations and upgrades for existing buildings and machines. In 2005, TSMC began to

rigorously follow operational procedures for high-risk situations and the "Contractor

OHSAS18001 Certification" plan. In addition, TSMC formed an "Avian Flu Prevention

2005 witnessed the selection of TSMC as the leading recipient of "Taiwan's Top Ten

Enterprises of Happiness" and "Corporate Social Responsibility Award". This illustrated

the success of our "continuous growth" and "corporate sustainability". Thank you for your

support and assistance. Together, we will create an even brighter future!

Project" in response to the possible risks of bird flu.


2

Fab2 Fab6

Company Profile

TSMC is the world's largest dedicated semiconductor foundry, offering industry-leading

fabrication process technologies, the largest manufacturing capacity among the

dedicated foundries, extensive library and IP portfolios, and other advanced foundry

TSMC currently operates two 12-inch wafer fabs, five 8-inch wafer fabs and one 6-inch

wafer fab. The Company also has substantial capacity commitments at two wholly

owned subsidiaries, WaferTech in the U.S. and TSMC (Shanghai) Company, Ltd. in

China, as well as at a joint-venture fab, Systems on Silicon Manufacturing Co.

TSMC was incorporated on February 21, 1987. TSMC's common shares are listed on

the Taiwan Stock Exchange. About 17.5% of our common shares are also listed on the

New York Stock Exchange (NYSE) in the form of American Depositary Receipts under

As a responsible corporate citizen, the Company is committed to public service and to

maintaining strong relationships with our customers, investors, employees, and the

services.

("SSMC"), in Singapore.

the symbol TSM.

communities where TSMC does business.


2

Fab12 Fab14

Company Profile

Sound corporate governance is rooted in a strong Board of Directors comprised of

experienced business leaders and distinguished scholars. The Board reinforces the

Company's commitment to financial integrity and management soundness. There are

three independent Board members among a total of nine directors. The Audit

Committee, which reports to the Board, was established in 2002. It oversees the

integrity of TSMC's financial and audit systems. The Audit Committee is comprised

solely of independent members of the Board. The Compensation Committee was

established in June 2003 and is comprised of three voting members, who are

independent Board members, as well as two non-voting members. It reviews and

makes recommendations on issues related to employee and executive compensation.

TSMC focuses on core business - IC Foundry. All materials and tools used in the

manufacturing process, including silicon wafers, chemicals, gases, electricity, water, etc.,

should be well managed in daily operations. TSMC's activities should not only meet

relevant environmental, safety and health (ESH) legal requirements, but should also be

benchmarked against recognized international practices. TSMC's goals are to prevent

pollution and efficiently use all resources, prevent incidents, improve employees' safety

and health, protect property and establish a well-being working environment. To achieve

1. All employees should take responsibility to maintain the highest-level quality of

2. Comply with ESH legal requirements and make continuous efforts to implement

3. Promote ESH concepts and awareness company-wide by providing sufficient

training and resources and actively seek cooperation and communication with

4. Introduce new international ESH concepts and technologies to enhance and

5. Conduct ESH assessments for new tools and materials used in research and

6. Communicate ESH issues with suppliers and contractors to encourage them to

the environment and ensure a safe and healthy workplace.

international state-of-the-art practices.

employees.

support all levels of management.

development to reduce ESH risks.

improve their ESH performance.

3 ESH Policies


these goals, TSMC is committed to continually improving the following.


4 ESH Organization

Originally, TSMC's ESH operations were in the hands of its Industrial Safety and

Environmental Protection Section, under the direct supervision of the VP of

Administration. In response to corporate growth, TSMC established a corporate ESH

Risk Management Department (RM) and an ESH Industrial Safety and Environmental

Protection Department (ISEP) in 1995. In 2001, ISEP began reporting directly to fab

directors to enhance overall operational efficiency. The Risk Management Department

was also promoted to be the Risk Management & Corporate ESH Division (RMESHD) in

2003. The RMESHD is under the supervision of the Senior VP of Material and Risk

Management and is in charge of Risk Management and Environment, Safety & Hygiene

The RMESHD is responsible for ESH planning, auditing and external communication. It

sets the company's ESH guidelines, introduces the best available technologies and runs

systematic audit programs to identify potential risks. On-site ISEP is responsible for

planning, supervising and implementing the ESH operations of each fab. New fabs are

under the care of the New Fab Planning & Engineering Division (NFPED), which

ensures that all the planning, construction and operation steps abide by domestic

regulations and the most up-to-date international specifications in order to build state-of-

In addition, in 1998, TSMC established a Technical Board with designated participants

from all fabs. Through the sharing and accumulation of technology and experience, it

greatly enhances cross-fab communication, cooperation and resource allocation, and it

generates Best Known Methods (BKMs) for problem solving and standardization.

Strategic Planning.

the-art semiconductor fabs that meet world ESH standards.


4 ESH Organization

Operation 1

Senior VP

F2&5ISEP

Fab 2

Fab 5

F3ISEP Fab 3

F7FAC&ISEP

Fab 6

Fab 7

F8ISEP

F6ISEP

Fab 8

F14ISEP

Fab 12

Fab 14

ISEP TB

F12ISEP

NFPED

RM

RMESH

MMD

WRMS

ESHP

MMD

ESD

WS

HROC I

Operation 2

Senior VP

MM & RM

Senior VPHuman Resources

President & CEO

ESD: Employee Service Department

ESHP: Environment, Safety & Hygiene Strategic Planning

HROC I: Human Resources Operations Center I

ISEP: Industrial Safety and Environmental Protection

ISEP TB: Industrial Safety and Environmental Protection Technical Board

LMD: Logistics Management Department

MMD: Material Management Division

NFPED: New Fab Planning and Engineering Division

RM: Risk Management

RMESHD: Risk Management & Corporate ESH Division

WMD: Warehouse Management Department

WRMS: Waste Resources Management Section

WS: Wellness Section


TSMC was founded.

ISEP was founded.

established in response to corporate growth.

Fab 2 was ISO14001 certified.

Fabs 1, 3 and 4 were ISO14001 certified.

Operational Technical Board was established; ISEP Technical Board

placed in charge of fab ESH-related operations.

TSMC became a member of International SEMATECH, allowing

TSMC to make continuous ESH improvements.



Fabs 1, 2, 3, 4 and 5 were OHSAS18001 certified.

Fabs 6 and 8 were ISO14001 certified.

Fabs 6, 7 and 8 were OHSAS18001 certified.

Fab 12 was ISO14001 and OHSAS18001 certified.

Planning.

SARS Crisis Management Team was established; general guidelines

were set for future infectious disease control.

renewed.

Fab 14 was ISO14001 and OHSAS18001 certified.

certification.

Risk Management Department (RM) was promoted to be Risk

Management & Corporate ESH Division (RMESHD), in charge of

Risk Management and Environment, Safety & Hygiene Strategic

ISO14001 (the most up-to-date version) and OHSAS18001 were

Encouraged contractors to obtain OHSAS18001 and staff skill

Corporate ESH Risk Management Department (RM) and on-site ESH

Industrial Safety and Environmental Protection (ISEP) were

1987

1990

1995

1996

1997

1998

1998

2000

2000

2000

2001

2001

2002

2003

2003

2004

2005

2005

5 ESH Milestones

Year Milestone


Continuous improvement is one of TSMC's beliefs. The Performance Index is an

important tool to review and measure our continuous improvement efforts. The ESH

performance index of TSMC involves external evaluation and internal control. External

evaluation includes the Dow Jones Sustainability Indexes (DJSI) and domestic awards

and honors. Internal control consists of environmental performance, ESH Management

6 Performance Index

System certification and occupational injury/illness statistics.

The following list outlines the ESH performance of TSMC in 2005:

DJSI: For five years in a row, from 2001 to 2005, TSMC has been selected as

Domestic Awards and Honors: We received the "National Award for Outstanding

Achievements in Industrial Waste Disposal and Resources Reduction and Recycling"

from the Environmental Protection Administration (EPA), "Water Conservation

Outstanding Performance Award" from the Water Resources Agency, "Labor Safety

& Hygiene Excellent Unit Award" from the Hsinchu Science Park Administration

(SPA), "Labor Safety & Hygiene Excellent Unit Award" from the Tainan SPA and

"National Safety & Hygiene Excellent Unit Five-Star Award" from the Council of Labor

one of the constituents of DJSI.

Affairs (CLA).


6

ESH Management System Certification: Fab 14 became ISO14001 and OHSAS

Environmental Performance

Injury Rate per Thousand Workers: Significantly reduced from 0.42 in 2004 to 0.19 in

2005.

Frequency Rate: Reduced from 0.20 in 2004 to 0.09 in 2005.

Performance Index

Wastewater Treatment: All wastewater analysis results met SPA wastewater

Water Resource Recycling: Revenue created per unit (1,000 metric tons) of tap

Air Pollution Control: The emissions measured have been in compliance with EPA

Energy Conservation: Revenue created per unit (million KWH) of electricity reached

treatment facility acceptance standards.

water reached NT$19 million.

standards.

NT$120 million.

Waste Management: Total waste recycling rate was 86.4%.

18001 certified.

Occupational Injury/Illness Statistics


"Socially Responsible Investment" is not only the derivative product of sustainable

economic development, but also the most vibrant field of the international investment

industry today. Social justice, environmental sustainability and financial performance

have become critical factors contributing to investment performance and social

To satisfy market demand, several world-renowned investment institutes introduced

the "Socially Responsible Investment Index". It not only serves as a comparative tool

for investors, but also as an effective indicator of marketability and overall investment

performance. In September 1999, Dow Jones and Sustainable Asset Management

(SAM) introduced the Dow Jones Sustainability Indexes (DJSI). Out of the Dow Jones

Indexes' constituents (approximately 3000 companies), the top 10% sustainability-

driven companies are selected to be the constituents of the DJSI. The selection criteria

include annual financial performance as well as weightings on economic, social and

TSMC has been privileged to be one of the sustainability leaders of the DJSI since

2001 for five consecutive years, and is the only enterprise to have been accredited

6 Performance Index

6.1 Dow Jones Sustainability Indexes (DJSI)

benefits.

environmental developments.

with the honor in Taiwan in 2003, 2004 and 2005.


TSMC has received honors and awards from various government agencies for its significant

contributions to ESH improvement.

66.2 Awards

Year Awards

2005

2005

2005

2005

2005

2004

2004

2004

2004

2003

2003

2003

2003

2003

2003

2003

Performance Index

"National Award for Outstanding Achievements in Industrial Waste

Disposal and Resources Reduction and Recycling" from the

"Water Conservation Outstanding Performance Award" from the

"Labor Safety & Hygiene Excellent Unit Award" from the Hsinchu

"Labor Safety & Hygiene Excellent Unit Award" from the Tainan SPA.

"National Labor Safety & Hygiene Excellent Unit Five-Star Award"


"Annual Environmental Protection Award for Enterprise" from the EPA.

"Labor Safety & Hygiene Excellent Unit Award" from the Tainan SPA.

"National Labor Safety & Hygiene Excellent Unit Award" from the

"Energy Conservation Award" from the Ministry of Economic Affairs


"National Award for Outstanding Achievements in Industrial Waste

Disposal and Resources Reduction and Recycling" from the EPA.


"National Labor Safety & Hygiene Excellent Unit Award" from the

"Labor Safety & Hygiene Excellent Unit Award" from the Hsinchu SPA.

New System of "Safety, Hygiene and Volunteer Protection Program

Environmental Protection Administration (EPA).

Water Resources Agency.

Science Park Administration (SPA).

from the Council of Labor Affairs (CLA).


CLA.

(MOEA).


CLA.

Unit Honor" from the CLA.


66.2 Awards

Year Awards


"National Award for Outstanding Achievements in Operation and

Maintenance for Pollution Control Facilities" from the Industrial

"Water Conservation Outstanding Performance Award" from the Water


New System of "Safety, Hygiene and Volunteer Protection Program

"National Award for Outstanding Achievements in Operation and

Maintenance for Pollution Control Facilities" from the IDB, MOEA.


2002

2002

2002

2002

2002

2002

2001

2001

2001

2001

Performance Index

Fab 6 received the "National

Labor Safety & Hygiene

Excellent Unit Five-Star Award"

for 3 years in a row.

Fab 8 received the "National

Award for Outstanding

Achievements in Industrial

Waste Disposal and Resources

Reduction and Recycling".

Fab 12 received the "Water

Conservation Outstanding

Performance Award".

Development Bureau (IDB), MOEA.

Resources Agency.

Unit Honor" from the CLA.

"Energy Conservation Award" from MOEA.

"Volunteer Protection Program 3 Year Honor" from the CLA.

"Energy Conservation Award" from the MOEA.


66.3.1 Wastewater Treatment


2005 TSMC Wastewater Quality Analysis Results

Fab 2 Fab 3 SPA

StandardMarch June September December March June September December

Fab

DateItems

Temperature( )

Suspended Solid (mg/L)

Chemical Oxygen Demand (mg/L)

Biochemical Oxygen Demand (mg/L)

Fluoride (mg/L)

pH 6.4

23.2

54.5

57.4

55.1

9.0

6.5

26.2

22.8

81.0

35.0

4.2

6.7

25.7

50.0

40.1

1.2

6.1

6.4

23.2

54.5

57.4

55.1

9.0

6.7

28.6

223.0

46.0

17.3

2.2

7.4

25.3

16.8

62.2

28.6

5.9

6.6

27.3

50.8

87.0

38.8

1.9

6.6

24.0

117.0

76.6

46.3

2.7

<5-10

<35

<300

<500

<300

<15

6.6

24.4

74.8

26.9

24.2

6.3

6.5

27.9

47.0

143.0

29.7

2.5

6.2

27.9

107.0

48.8

30.2

3.0

5.3

25.2

298.0

62.2

28.7

5.0

7.1

21.2

31.0

128.0

35.3

6.2

7.0

22.2

50.0

110.0

60.1

4.5

5.6

31.1

51.0

141.0

42.8

10.9

5.8

25.0

44.5

93.6

37.4

6.1

<5-10

<35

<300

<500

<300

<15

Fab

DateItems

Temperature( )




Fluoride (mg/L)

pH

Fab 5 Fab 6 SPA

StandardMarch June September December February April October December

<5-10

<35

<300

<500

<300

<15

7.3

21.8

18.5

30.4

11.7

4.2

7.2

23.1

2.5

56.5

14.8

6.6

7.0

24.8

3.0

42.7

10.2

5.4

6.9

22.6

5.0

46.2

11.5

4.1

6.9

24.8

14.5

148.0

49.4

5.9

7.1

24.7

7.0

72.1

30.4

6.1

7.6

27.6

49.0

105.0

14.0

9.2

6.9

21.3

45.5

127.0

44.5

4.2

Fab

DateItems

Temperature( )




Fluoride (mg/L)

pH

Fab 7 Fab 8 SPA

StandardFebruary May August November February May August December

6.5

26.4

26.2

158.0

63.1

6.2

6.0

27.0

100.0

243.0

103.0

6.2

5.6

28.9

10.1

66.3

37.4

4.2

6.9

26.7

56.5

289.0

77.7

5.9

7.1

22.0

60.0

59.3

2.0

13.4

7.4

21.1

126.0

62.2

16.4

13.5

6.6

26.8

135.0

110.0

39.5

11.3

7.1

27.4

68.0

293.0

224.0

6.4

<5-10

<35

<300

<500

<300

<15

Fab

DateItems

Temperature( )




Fluoride (mg/L)

pH

Fab 12 Fab 14 SPA

StandardMarch June September November February April October December

All TSMC fabs not only monitor wastewater discharge on-line, but also analyze

wastewater quality at least four times a year. All the analysis results have met SPA

wastewater standards.


TSMC Water Conservation Performance of 2000-2005

6N

et S

ale

s/C

ity W

ate

r C

onsu

mptio

n

(N

T$ m

illio

n p

er T

housa

nd T

ons)

Net Sales from City Water Consumption

2001 2002 2003 2004 2005

25

20

15

10

5

0

6.3.2 Water Resource Recycling


ItemAverage process water recycling rate(%)

Water saved (million tons)

Water saved, measured in standard swimming pools

Water saved, measured in the full capacityof Paoshan Reservoir

2001 2002 2003 2004 2005

69.5% 73.9% 75.6%

991

3,964

1.85

76.9%

1,162

4,649

2.17

73.4%

1,331

5,323

2.49

859

3,438

1.61

711

2,844

1.33

1

2

3

Note: 1. Average process water recycling rate is defined by the Science Park Administration.

2. A standard 50 x 25 x 2m swimming pool contains up to 2,500 tons of water.

3. Paoshan Reservoir is the major reservoir that supplies water to Hsinchu Science Park. The full capacity of

Paoshan Reservoir is 5.35 million tons.

Water is a precious resource. For effective utilization of water resources, TSMC

dedicates itself to the improvement of its water recycling rate. Due to adjustments in the

process water equipment and the installation and improvement of waste water recycling

equipment, the process water recycling rate showed great improvement, from 69.5% in

2001 to 73.4% in 2005, up 1.87 times. The average process water recycling rate in 2005

was slightly lower than that of 2004 mainly because of the two fabs added in 2005. The

process water recycling rate of these two fabs is gradually rising.

With regard to the net sales/city water consumption, TSMC has since 2002

implemented a series of water conversation programs and practices to greatly reduce

water consumption and to enhance water usage efficiency, such as the wet scrubber

water recycling system, the organic/acidic water recycling system, the Chemical

Mechanical Polishing (CMP) water recycling system and the copper CMP water

recycling system.


6

Acidic gases pollution control

facility -Wet Scrubber

2005 TSMC Exhaust Andlysis Results

92.0% 92.7% 93.3% 95.3% * ** *

*

*

*

*

*

*

*

0.0031

*

*

*

*

*

Stack No.

H2SO4 (kg/hr)

Fluoride (kg/hr)

HCl (kg/hr)

Cl2 (kg/hr)

NH3 (kg/hr)

HNO3 (kg/hr)

H3PO4 (kg/hr)

VOCs DRE (%)

ND

ND ND

ND

ND ND

ND

0.093

0.0024

0.52 0.24

0.051 0.046

0.021 0.013

0.02

0.097

0.016 0.022

0.0042 0.0022

0.0083 0.0088 0.0035

ND ND

ND

ND

* *

*

*

*

*

*

*

*

*

*

*

*

*

*

* *

*

*

*

*

*

*

*

*

*

*

*

* * *

*

*

*

*

*

*

*

*

* ***

Fab 5Fab 2Fab

P001 P003 P005 P006 P008 P009 P011 P013 P101 P102 P104 P105 P106

* *0.053 0.013 0.02 0.033 0.034* * * * *

96.1% 93.3% 97.3% 96.4%

0.00244 0.00233

0.00305

0.00338

0.0191

0.0015

0.00204 0.005

0.00184 0.00118

ND ND

ND* *

92.6% 92.7%

ND 0.012 0.0072

*

95.3%

*

*

0.0028

*

0.03

0.17

ND

ND

0.028

ND

*

0.023

ND

ND

0.027

ND

ND

*

P102 P104 P105 P107 P112 P113 P114 P119 P120 P101 P107 P110 P301 P307 P308 P315

TSMC has installed effective air pollution control equipment

in each wafer fab to meet the air pollutant emission

standards set by the EPA. TSMC also established a

backup system for the pollution control equipment to

continue waste gas control and to lower the risk of air

pollutant emission in the event of equipment breakdown.

For Volatile Organic Compounds (VOCs) pollution control

equipment, TSMC has installed backup fuel supply

systems that will kick in to ensure normal equipment

operations if the original fuel supply system experiences

All TSMC fabs continuously monitor the real-time

concentration of VOCs and conduct annual emission

measurements as required by environmental laws. The

emissions measured have been far below EPA standards.

6.3.3 Air Pollution Control


VOCs pollution control facility -

Zeolite Concentration Rotor

Stack No.

H2SO4 (kg/hr)

Fluoride (kg/hr)

HCl (kg/hr)

Cl2 (kg/hr)

NH3 (kg/hr)

HNO3 (kg/hr)

H3PO4 (kg/hr)

VOCs DRE (%)

Fab 7Fab 6Fab

difficulties.


6

Note:

1. Treatment of H2SO4, Fluoride, HCl, HNO3 and H3PO4 meet the control factors of wet scrubber of "Air Pollution Control and

Emission Standards for Semiconductor Manufacturing Industry".

2. Treatment of VOC meets the DRE (Destruction Removal Efficiency) (>90%) or factory emission (<0.6kg/hr) of "Air Pollution

Control and Emission Standards for Semiconductor Manufacturing Industry".

3. Treatment of NH3 and Cl2 meets the "Air Pollutants Emission Standards for Stationary Pollution Sources".

4. : Analysis not required.

5. ND: Not Detected.

0.0011 0.0015

0.0003

0.0029

0.0100 0.0024 0.0033

0.00010.0012

0.0049

0.0200 0.0600 0.0200 0.0500

0.0027

0.0037

0.0200 0.3100

*

P101 P103 P104 P105 P106 P107 P108 P109 P110 P112 P113 P114 P115 P116 P117 P118 P119 P201 P209 P210 P214 P218

ND ND

0.0001

ND

ND

0.0024 0.0025

ND

*

ND

0.0024 0.0019 0.0025 0.0013 0.0004

0.0030 0.0030

0.0036

0.0100

0.0028

ND ND

NDND

0.0040 0.0017 0.0005

0.110 0.110 0.160

ND ND ND

ND

0.011 0.002 0.050*

ND ND ND ND

0.0006 0.0100

0.0011

0.01000.0009

0.0100 0.0700 0.0600

ND ND

0.0010 0.0046

0.180

ND ND

0.0003

0.0000

0.0005

0.0003

ND

0.0039

0.0023

0.0020

ND

P111

0.04

0.02 0.073

0.12

0.02

0.0430

0.08

0.001

0.004

0.010

93.7%

0.002

ND

ND

92.4% 95.2%

0.050

0.100

0.019

0.017

0.0060

ND

ND

0.033

0.092

0.017

0.01

ND

ND

0.052

0.110

0.016

0.0140

ND

ND

0.042

0.021

0.02

ND

ND

ND

ND

P103 P110 P113 P114 P002 P008 P009 P012 P013 P016 P018 P022

0.0158

0.0092

0.0951

0.0121

0.0162

0.0069

0.0030

0.0173

0.0100

0.1000

0.0130

0.0175

0.0077

0.0032

0.0128

0.0075

0.0772

0.0098

0.0001

0.0014

0.0024

0.0140

0.0081

0.0831

0.0105

0.0537 0.0027

0.0015

0.0026

97.0% 92.4% 93.2% 93.6% 95.5% 91.8% 96.3%

P102 P105 P107 P108 P109 P110 P114 P115 P116 P117 P119 P120

Stack No.

H2SO4 (kg/hr)

Fluoride (kg/hr)

HCl (kg/hr)

Cl2 (kg/hr)

NH3 (kg/hr)

HNO3 (kg/hr)

H3PO4 (kg/hr)

VOCs emissiom (kg/hr)

Fab 3Fab

Stack No.

H2SO4 (kg/hr)

Fluoride (kg/hr)

HCl (kg/hr)

Cl2 (kg/hr)

NH3 (kg/hr)

HNO3 (kg/hr)

H3PO4 (kg/hr)

VOCs DRE (%)

Fab 8 Fab 12Fab

Stack No.

H2SO4 (kg/hr)

Fluoride (kg/hr)

HCl (kg/hr)

Cl2 (kg/hr)

NH3 (kg/hr)

HNO3 (kg/hr)

H3PO4 (kg/hr)

VOCs DRE (%)

Fab 14Fab

2005 TSMC Exhaust Andlysis Results

6.3.3 Air Pollution Control



6

Heat Recycling Chiller

TSMC continuously makes concerted efforts to conserve energy and reduce the

emission of the greenhouse gas carbon dioxide. Net sales/power consumption

increased from NT$92 million/million KWH in 2001 to NT$120 million/million KWH in

2005. The revenue created per unit of electricity in 2005 was slightly lower than in

2004 because of the two new fabs built in 2005, which caused electricity usage to rise

Take Fab 12 as an example; its major accomplishments in energy conservation


6.3.4 Energy Conservation

Net Sales from Power Consumption160

140

120

100

80

60

40

20

0

Net S

ale

s/P

ow

er

Consu

mptio

n

(NT

$ m

illio

n p

er

mill

ion K

WH

)

2001 2002 2003 2004 2005

compared to previous years.

include:

The installation of a heat recycling chiller that produces 35 warm water and

The adoption of inverters in air conditioning, exhaust and process water systems

The adoption of a mini-environment energy-conservation design for the clean room

The use of dual-temperature chilled water hydraulic system enhances thermo

saves 36,595 MWH/year.



exchange efficiency and saves 2,409 MWH/year.


6TSMC was the first company in the industry to establish a designated unit for the

effective management and planning of waste recycling and disposal. To attain the goal of

sustainable resource utilization, TSMC balances available technology with the cost, and

then sets its priority on process waste reduction and pollution prevention to continuously

minimize waste production. Once a substance is no longer suitable for its original

purpose, recycling will then be considered in the order of material recycling, energy

recycling and proper disposal. To stay on top of waste disposal, TSMC has annual audit

plans that sporadically dispatch staff to follow disposal trucks and routinely audit waste

disposal and recycling contractors to ensure legal and proper disposal of waste and to

The overall waste recycling rate rose significantly to 86.7% in 2005 from 83.6%


6.3.5 Waste Management and Resource Recycling

Overall Waste Recycling Rate

100

80

60

40

20

0

58.2

73.9

76.883.6 86.7

2001 2002 2003 2004 2005

prevent environmental pollution.

TSMC's achievements in waste reduction and recycling in 2005 include:

in 2004.


6

*TSMC was the first company in Taiwan to submit a recycling application for this item and the first to get

approval for it from the Ministry of Economic Affairs and National Science Council.

Test wafers are polished for recycling. In 2005, about 1.61 million wafers were

Screened wafers are recycled and used by solar energy system manufacturers as

materials for solar cell production. In 2005, about 286,000 wafers were recycled to

Wafer boxes are recycled and washed for re-use. In addition to wafer material boxes,

recycling sources include those sold to international customers and domestic

downstream packaging and testing companies. In 2005, about 22,000 wafer boxes

Drainage pipelines of process tools are inspected to prevent improper discharge of

wastewater into waste solvent collection tanks and to effectively reduce the amount

recycled to reduce waste wafers by about 120.8 metric tons.

reduce waste wafers by about 18.7 metric tons.

were recycled and about 54.9 metric tons were re-used.

of waste solvents.

Recycled Items Post-Recycling Products

Waste Sulfuric acid

*Calcium fluoride (CaF2) sludge

*Residual Polishing Liquid

Waste Cupric Sulfate

Waste Cupric Liquid

Thinner of photo resistant

Waste Isopropyl Alcohol (IPA)

Stripper removing photo resistant layer

Solvent removing photo resistant layer

Waste Phosphoric acid

* Waste Hydrofluoric Acid

Empty Toner/Cartridge

Kitchen scraps

Turned into Aluminum Sulfate

Cement Additive

Potassium Silicate

Industrial Grade Cupric Sulfate

Recycled for production of new etching liquid

Distilled for Reuse

Distilled for Reuse

Distilled for Reuse

Cement kiln supplementary fuel

Industrial Grade Phosphate, Calcium Phosphate

Turned into Calcium fluoride (Flux)

Recycled Toner/Cartridge

Animal feed


6.3.5 Waste Management and Resource Recycling

Waste Recycling Items and Post-Recycling Products


6All TSMC fabs were ISO14001 and OHSAS18001 certified in 1996 and from 2000

onwards. In order to minimize potential ESH risks, TSMC proposes improvement

projects such as pollution control, energy and resource conservation, waste reduction,

safety and health management and fire and explosion prevention as well as risk

prevention. In 2005, Fab 12P3 and Fab 14 were certified. The fabs and their

respective ISO14001 and OHSAS18001 certification years are listed below:

ISO14001 Certificate OHSAS18001 Certificate

ISO14001

1996

1997

2000

2001

1997

2001

2002

2005

2005

Fab

Fab 2

Fab 3

Fab 5

Fab 6

Fab 7

Fab 8

Fab 12

Fab 12P3

Fab 14

OHSAS18001

2000

2000

2000

2001

2001

2001

2002

2005

2005

Performance Index

6.4 ESH Management System Certification


6

1.20

1.00

0.80

0.60

0.40

0.20

0.00

2.50

2.00

1.50

1.00

0.50

0.00

Performance Index

6.5 Occupational Injury/Illness Statistics

million labor-hours).

Note: Traffic accident injuries outside fabs are not included

TSMC uses the following two indices defined by the Council of Labor Affairs (CLA) to

evaluate the effectiveness of occupational health and safety programs: Injury Case

Rate per thousand workers (the number of lost-day injury cases per thousand

workers), Frequency Rate (FR, the number of disabling injuries and illness cases per

The FR of TSMC was reduced from 0.20 in 2004 to 0.09 in 2005 -- much lower than

the Taiwan national FR of 2.0 reported by the CLA in 2004.

1.02

2000 2001 2002 2003 2004 2005

0.66

0.46 0.42

0.19

2.33

Injury Case Rate per Thousand Workers

0.48

2000 2001 2002 2003 2004 2005

0.280.21 0.20

0.09

1.09

Frequency Rate

Injury Case Rate per Thousand Workers reported by the CLA in 2004.

Frequency Rate

TSMC's injury case rate per thousand workers was significantly reduced from 0.42 in

2004 to 0.19 in 2005 -- much lower than the Taiwan national injury case rate of 4.2

reported by the CLA in 2004.


7The International Standards Organization (ISO) established a series of environmental

management systems and tools in 1996. TSMC has formulated relevant standards in

In 1996, Fab 2 was the first TSMC fab to be ISO14001 certified, while other fabs

followed suit according to a planned schedule. In the process of promoting the

environmental management system, TSMC leveraged the advantage of

computerization to establish related systems to meet the PDCA principles of follow-up

management. The systems included a significant environmental consideration

identification system, an environmental management system and a legal and

communication management system, as well as a corrective action and a non-

TSMC began to implement environmental accounting in 2002, incorporating

environmental protection costs into the accounting system to establish a green

accounting system. In addition, TSMC integrated efficiency assessment tools with the

environmental management system to assist fabs with economic efficiency evaluations

as they carried out environmental management. TSMC began to implement "life cycle

evaluations" in the same year and completed the Eco-profile in response to future

As a result of the EU's Restriction of Hazardous Substances (ROHS), TSMC in 2004

invited nine of its primary raw material suppliers to participate in the "Green Supply

Chain Project" organized by the Bureau of Industrial Development. This ensured that

their products contained no banned substances and created a situation that benefited

In response to the effectiveness of the Kyoto Accord, TSMC in 2005 began to promote

greenhouse gas inspection and verification. TSMC was ISO14064 certified through the

examination of a fair third party. This serves as a basis for future gas emission

Environment Management

accordance with this series.

compliance management system.

international legal requirements and customer demand.

customers, suppliers and TSMC.

reduction.


7

TSMC Environmental Costs in 2005Period: 1/1/2005 - 12/31/2005 Unit: per NT$1,000

Period: 1/1/2005 - 12/31/2005 Unit: per NT$1,000

Classification Description Investment Expenses

1. Direct cost for reducing environmental impact

(1) Pollution Control Fees for air pollution control, water

pollution control and others

Costs for resource (e.g. water) conservation

Costs for waste treatment

(including recycling, incineration and landfill)

(1) Cost of training

(2) Expenditure of environmental management system

and certification

(3) Fees of environmental measurement and monitoring

(4) Fees of purchasing environmental protection products

(5) Fees of environmental protection organizations

(2) Resource Conservation

(3) Waste Disposal and

Recycling

2. Indirect cost for reducing

environmental impacts

(managerial cost)

3. Other environment-related

costs

4. Total

(1) Costs for de-contamination and remediation

(2) Environmental damage insurance and environmental

taxes

(3) Costs related to environmental settlement,

compensations, penalties and lawsuits

1,301,348

188,880

0

105,930

0

1,596,158

0

1,071,532

423,000

92,976

158,760

1,746,268

TSMC Environmental Efficiency in 2005

Items Description Efficiency (NT$1,000)

1. Recycling of industrial

waste

2. Reduction of industrial

waste

Recycling of waste pallets, packaging materials, wafer

boxes, wafers, computers and accessories, fluorescent

lamps, metals, empty toner cartridges and waste

Costs of industrial waste disposal saved by reducing

their quantity.

3. Total 725,577

10,577

715,000


7.1 Environmental Accounting

TSMC established its environmental accounting system in 2002 and integrated the

environmental accounting practices with the Environmental Management System

(EMS) in 2003. The integrated system not only facilitates each fab to implement

environmental management programs but also simultaneously evaluates their

economic efficiency. By the end of 2005, the total benefit for promoting environmental

management programs, including waste recycling and industrial waste reduction,

amounted to NT$725 million.


7TSMC has persistently conducted the "Life Cycle Assessment Project" since 2002.

This project collects and calculates the data of wafer manufacturing, from raw

materials suppliers to the products, including energy and raw materials consumption

and pollutant generation from silicon mining, wafer production and wafer

manufacturing. In 2005, TSMC began to apply the Life Cycle Assessment to 12-inch

wafer manufacturing. So far, TSMC Fabs 2, 3, 5, 6, 7, 8 and 12 have completed their

respective Eco-profiles, which not only satisfies international standards, such as the

Energy using Product directive of the EU, but also meets customer requirements.

Data show that water is the most heavily consumed raw material, followed by air, coal

and petroleum oil. Air can be viewed as a recoverable resource and is therefore

inexhaustible. According to the weighting analysis, the most significant environmental

impact of wafer manufacturing is water consumption, followed by energy consumption,


7.2 Life Cycle Assessment

aquatic toxicity and global warming effect.


7

List of Substances Banned by TSMC

In 2002, TSMC began to implement "Green Procurement." In 2004, TSMC invited its

primary raw material suppliers to participate in the "Green Supply Chain Project",

organized by the Bureau of Industrial Development in conjunction with the Industrial

Technology Research Institute, as part of TSMC's endeavors to introduce its efforts in

green production to up- and down-stream associates. During the annual "Supply

Chain Management Forum" in 2005, TSMC shared such concepts as "Green

Procurement" and "Greenhouse Gases Inventory and Reduction" with its suppliers

TSMC created a banned substance list for wafer manufacturing, including the RoHS

regulated by the European Union for electronic products, Ozone Depleting

Substances, Polychlorinated Biphenyls and carcinogens. At the same time, TSMC also

demanded that all its suppliers refrain from using these banned substances to ensure

that all TSMC products stay in compliance with customer and legal requirements.


7.3 Green Procurement

Asbestos and its compounds

Azo-Based Materials

Cadmium and its compounds

Certain Ethylene Glycol Ethers

Chromium (VI) and its compounds

Lead and its compounds

Mercury and its compounds

Ozone Depleting Substances

Polybrominated Biphenyls (PBBs)

and their Ethers/Oxides (PBDEs)

Polychlorinated Biphenyls (PCBs)

Polychlorinated Naphthalenes

(more than 3 chlorine atoms)

Radioactive substances

Shortchain Chlorinated Paraffins

Tributyl Tin, Triphenyl Tin and oxides

and contractors and has received positive feedback.


7Perfluorinated compounds (PFCs), such as CF4, C2F6, SF6, NF3, CHF3, C3F8 and

C4F8, are widely used in the semiconductor manufacturing processes and contribute to

the global warming effect. Accordingly, PFCs emission reduction has been one of the

emphases of the Taiwan Semiconductor Industrial Association (TSIA) and the World

Semiconductor Council (WSC). TSMC also actively engages in PFCs gas emission

TSMC signed a memorandum with the TSIA and the EPA and formulated the PFCs

emission reduction policy and its implementation plan. TSMC has committed to

reducing PFCs emission by 10% below the average emission value of 1997 and 1999

by the year 2010. To reach this objective, TSMC has adopted the following strategies:

To measure the fraction of PFC destroyed or transformed by Chemical Vapor

Deposition (CVD) process tools and the fraction of PFCs destroyed by the PFCs

abatement systems for the calculation of actual emission coefficients and the

To evaluate and use effective PFCs abatement systems in combustible and catalytic

In 2005, TSMC executed a thorough

Greenhouse Gas (GHG) inventory in 2004. The

results were accepted and certified by a

certification institute. The certified results can

be used by TSMC as references for GHG

emission reduction policies. They can also help

prepare TSMC to meet future regulations,

carbon dioxide trade and carbon asset

ISO 14064 Verification Statement


7.4 Greenhouse Gas Emission Reduction

reduction.

management requirements.

of PFCs emitted.

types.

To evaluate the feasibility of whether C3F8 can be used as cleaning gas during

processing Chemical Vapor Deposition (CVD).


8TSMC based its safety and health management on the OHSAS18001 system. The on-

line system enhances the managerial efficiency of PDCA in order to achieve the goals

of accident prevention, employee safety and health enhancement and company asset

TSMC fabs continued fab-wide emergency response drills in 2005. In its pursuit of

excellence, TSMC also introduced a high-risk operation management system for

effective utilization of managerial resources. After the WHO announced that avian flu

could potentially become a new human-to-human epidemic, TSMC formed the "Avian

Flu Prevention Project" to lower operational risks. Various measures have also been

taken to protect TSMC against the impact of earthquakes. All these protection and

prevention efforts demonstrate TSMC's continuous efforts toward perfecting its safety

Safety and Health Management

protection.

and health management.


88.1 Emergency Response

Chemical Substance Leakage Handling

Emergency Evacuation of Employees

First Aid Practice

Emergency Response Team

Emergency response requires comprehensive

planning and continuous modification and

practice. TSMC's emergency response

procedures include the initial immediate

response (or "Emergency Response Period"),

emergency management steps and disaster

recovery plans. TSMC has a disaster response

organization set up at company headquarters

that formulates "Disaster Recovery Guidelines".

Each fab also formulates its own disaster

recovery plan covering specific, detailed

response procedures for potential disasters.

TSMC fabs execute large-scale emergency

response drills and evacuation drills annually.

The 2005 emergency response drills included

nighttime fire drills, toxic gas leakage drills,

weekend magnitude 5 earthquake drills, first-aid

drills and emergency evacuation drills. TSMC

also practiced emergency response drills

specifically for on-site service contractors in

order to establish mutual supporting

mechanisms to minimize possible damages.

In 2005, aside from the routine quarterly

emergency response drills by the engineering

and facility departments, drills on chemical

substance leakage, oxygen shortage as a result

of ammonia leakage, boiler fire and car wreck

evacuation were also conducted for labs,

canteens, dormitories and business vehicles.



88.2 Earthquake Preparedness

In recent years, there have been many serious natural disasters. The tsunami that

overwhelmed Southeast Asia, the earthquake that shook Kashmir, the storms that ran

rampant in the Atlantic and floods everywhere claimed several hundred thousand lives

and resulted in hundreds of billions of U.S. dollars in economic losses. According to past

statistics, earthquakes are responsible for 98% of total natural disaster fatalities. To

mankind, earthquakes are more devastating than any other calamity of nature.

Taiwan is right at the heart of an earthquake zone. We have no choice but to face the

unavoidable. To reduce casualties and property losses, TSMC laid down a series of

earthquake preparedness projects for buildings, facilities, labs, computer rooms and

process stations. The projects include pre-earthquake seismic-resistant capability

evaluation, seismic design and reinforcement, post-earthquake damage evaluation,

speedy earthquake damage assessment, earthquake damage recovery and

reinforcement. To ensure that TSMC is well protected against seismic impacts, TSMC

has established a design review mechanism, set up procedures and periodical onsite

inspections, undergone construction improvement projects and held regular training

programs. In addition, it also maintains close interactions and technology exchanges

with industrial associations, the Industrial Technology Research Institute, academic

institutions, governing agencies and the National Center for Research on Earthquake

Engineering (NCREE) in order to minimize seismic risks. In response to the new anti-

seismic requirements on facilities, the design of labs, computer rooms and process

stations, TSMC has begun to promote a professional registration system in order to align

its seismic resistant capability with international standards and ensure design quality and

validity. Aside from its endeavors in engineering, construction and management

The ultimate goal of this series of efforts is to prevent earthquakes from seriously

impacting the operation, reputation and credibility of TSMC. Furthermore, it is to ensure

that, even under severe natural disasters, TSMC remains fully committed and capable of


improvement, TSMC also purchased earthquake insurance to reduce losses.

fulfilling its commitments to its customers, shareholders and employees.


8TSMC is committed to communicating with and encouraging its contractors and

suppliers to improve their own ESH performance. In the annual contractor

communication meeting, TSMC shares its ESH concerns and improvement

recommendations with the participants and recognizes and awards contractors for

outstanding performance. In 2005, TSMC made arrangements for Chen Full

International Co., Ltd. and Marketech International Corp. to share their experience on

In 2005, TSMC hired a total of 1,680 contracting companies, from which as many as

970,000 workers entered TSMC fabs with 9,860,000 work hours. These data indicate

the significance and frequency of TSMC's contractor activities. Data analysis further

reveals that most of the contractor accidents were caused either by contractors' failure

ESH Award Presented to an Outstanding Contractor

8.3 Contractor Management


promoting OHSAS-18001 and worker skill certification.

to comply with work procedures or by improper hardware safety design.


2005 ESH Award & Communication

Meeting

Self-management Experience Sharing

88.3 Contractor Management


Consequently, in 2005, TSMC employed critical-work-management and self-

management to govern the work performed by contractors. Critical-work-management

defines tasks that may cause injuries, electric shocks, fires and toxic gas/chemical

substance leakages as Level-1 works and tasks that may result in system shutdowns

and production interruptions as Level-2 works. In accordance with the nature of the

operations, it defines the safety/protective measures and control procedures that

workers must follow; it also requires fulltime supervision by TSMC and the contracting

company over critical tasks that may jeopardize workers' safety. The self-management

policy requires that all contractors of TSMC's critical works complete the establishment

of their own OHSAS-18001 safety and sanitation management system by July 2007,

and TSMC allows only those who have passed worker skill certification to work on

critical works. The employment of self-management is meant to increase the

contractors' sense of ownership and responsibility with the hope to promote self-

awareness for all contractors in the industry. Since its implementation, accidents

caused by contractors have significantly decreased.

8In response to the possibility of avian flu becoming a human-to-human epidemic and

its possible impact on employees and operations, TSMC formed an "Avian Flu

Prevention Project". The project is based on our SARS experience and the reference

from the epidemic prevention experience of the CTCI Corporation, the "New Influenza

Combat Plan" of the Center of Disease Control and the "Preparation and Response

Project against Major Influenzas" of the Singapore government, plus consultations with

The project includes employee disease prevention education, material preparation,

kitchen disease prevention management, leave and travel management, case

management, notification and medical assistance, mask wearing and hand washing,

supplier/contractor and visitor restriction, body temperature measurement standards,

working at home plan, environment control and disinfection, contact reduction plan and

waste disposal, etc. TSMC's senior VP of Materials and Risk Management also holds

regular meetings to review disease prevention preparations. If avian flu cases occur in

Taiwan or if the virus becomes human-to-human transmission, TSMC will launch

different projects in accordance with the stage of the epidemic to lower the impact of

8.4 Avian Flu Prevention Project



TSMC Disease Prevention Information Website

domestic epidemic experts and distinguished medical doctors.

avian flu on its employees and operations.

Starting in 2005, TSMC extended the safety and health concepts from fabs to all work-

related environments, including kitchen and canteen safety, dormitory safety and even

employees' domestic safety. TSMC also kicked off more health promotion programs

along with more promotional activities to improve employees' safety and health

Healthy and Well-being Work Environment


9

awareness and for the further establishment of a safety culture.


9

Dormitory Fire Safety Inspection Transportation bus evacuation drill

TSMC believes that all employees should take responsibility to ensure a safe and

healthy workplace. Since 2005, in addition to the monthly executive ESH committee

meetings, fab engineering and facility managers also are required to hold safety

preview meetings to be on top of ESH issues, including ESH performance, direction

and improvement status. These meetings strengthen the leaders' engagement,

understanding and supervision of ESH issues and shape a safety culture of self-

Aside from the commitment to continuous improvement of the ESH management

system, TSMC introduced various activities and projects to enhance employee safety

awareness, including home safety and fire prevention activities, safety seminars for

children and the elderly, defensive driving safety education, dormitory fire evacuation

drills, CO poison prevention practices and a job observation program. Educational

materials and films related to the above activities have been made available on the

company's ESH website from which employees can download information to share

In 2005, TSMC began to intensify its safety inspections of non-operation areas such

as employee dormitories, kitchens, laboratories, MIS rooms and warehouses. All

concerned departments have been required to establish self-inspection and self-

9.1 Safety Culture


management.

with family members or others.

management mechanisms.


9TSMC insists on safeguarding its employees' health and safety according to the

highest standards, and it ensures that sound healthcare and staff assistance services

are provided in every fab. For physical health, TSMC employees are entitled to a

series of health improvement services and programs including outpatient visits, 24-

hour nursing care, annual physical examinations, women's healthcare, cancer

screenings, exercise, fitness and weight loss. For enhancement of mental health, there

are pressure management programs and workshops, free psychological consultations

and staff assistance projects. In addition, all employees can find health information

Furthermore, TSMC offers clinical and dental care services in Fab 12. Medical doctors

are available to offer Chinese and Western medicine consultation and treatment

services, and TSMC employees are entitled to various examination services and

dental care. Health enhancement activities include nutrition consultations, weight-loss

classes, a self-paid acupuncture weight-loss program, Helicobacter Pylori C-13 Urea

Breath Tests, thyroid ultrasound examinations, an endocrinology clinic, a dermatology

clinic, bone mineral densitometry examinations and cancer screenings. In the future,

TSMC will continue to introduce more convenient professional health improvement

9.2 Health Enhancement


through the company's healthcare website.

programs.


9

ESH Month ESH Forum ESH Month Achievement Exhibition

Fab Emergency Response

Month Outstanding Works

Residential Safety Video Game Contest

To promote caring for the planet and for employee safety and health, TSMC not only

holds a variety of ESH activities each year but also participates in related ESH events

organized by the SPA and other environmental protection organizations. These

activities help TSMC employees internalize the concepts of environmental protection

into their lives and raise their awareness toward safety and health. The major activities

Participation in the ESH Month Activity sponsored by the SPA

Fab Emergency Response Month Activities

TSMC takes on the responsibility for organizing ESH forums for the ESH Month

Activity and invites experts and scholars from the industry, government agencies

and academia to give lectures and hold seminars on greenhouse gas reduction and

disaster recovery in order to enhance Science Park companies' ESH awareness.

By playing quiz and video games and contests, TSMC familiarizes employees with

the methods and steps of emergency response. TSMC introduces employees to

hazardous factors of home life as well as to proper procedures for childcare.

9.3 ESH Activities


that TSMC organizes or takes part in are as follows:


10The TSMC Education and Culture Foundation was established to facilitate the

Company's dedication to becoming Taiwan's leading corporate citizen. We have

been an active sponsor of various educational, cultural and community activities in

Taiwan for seven years. Through sponsorship of and engagement in these public

activities, the Foundation aims not only to make a contribution to society, but also to

share with the public the business philosophies that led to the Company's success.

TSMC Education and Culture Foundation

Social Responsibility Information

Commitment to Education

Sponsorship of Art Events and Aesthetic Education

TSMC is committed to supporting education and cultivating future leaders. We

work closely with leading universities on a wide-ranging program of

scholarships, chair professor positions, academic activities and lecture series. In

2005, the Foundation donated NT$120 million to the prestigious National Taiwan

University to build a new research center for the chemistry department. The

research center will be dedicated to cutting-edge chemistry and materials

science research and to basic science education. TSMC is also committed to

promote research and innovation through donations to leading international

educational institutions. In 2005, we completed a three-year US$1,000,000

sponsorship to Stanford University's Nanocharacterization Laboratory. In

addition, TSMC donated US$500,000 to MIT Sloan School of business for the

project of a new building complex.

rehearsal, introducing them to classical music at an early age.

In 2005, the Foundation sponsored various performances and art events,

ranging from concerts and drama to fine art exhibitions. Our sponsorship

culminated with the TSMC Concert by the Berliner Philharmoniker, its first

performance in Taiwan. The event generated significant publicity and was

enjoyed by well over 30,000 people, including those who attended the outdoor

broadcast. The Foundation also made special arrangements to enable

over 300 schoolchildren from the Hsinchu area to sit in on the orchestra's


The Foundation has long been an avid supporter of fine arts. In 2005, we

considerably expanded the scope of the third annual "TSMC Art Festival". The

venue for the events was extended from Hsinchu to Tainan. The concert for

the opening night of the 2005 program was organized as a charity event and

a total of NT$1.38 million was raised for the education of underprivileged

aboriginal children of the typhoon victims in Hsinchu County. TSMC also

donated a new Steinway piano to Hsinchu City Concert Hall. During the

twomonth Art Festival, the Foundation arranged a total of 29 different activities,

including concerts, traditional operas, lectures, and family-oriented activities.

The Festival attracted over 10,000 people from the local communities.

The TSMC Education and Culture Foundation has encouraged over 200

employees and family members to join the volunteer program to make

contributions to society through personal participation. For three consecutive

years, members of the group have served as volunteer weekend curators at

the National Museum of Natural Science, Taichung. The TSMC volunteer

group has served more than 200,000 visitors to date and has been recognized

as an "Outstanding Volunteer Team" by the National Museum. In addition,

the Foundation established a "TSMC Book Reading Volunteer Program,"

now in its second consecutive year, where over 50 employees and their family

members read stories to elementary school children in remote Hsinchu

townships. This program hopes to open a window of knowledge for these

10 Social Responsibility Information

Contribution to Local Communities

Dedication to the Employee Volunteer Program

resource-deprived children through the power of reading.


10 Social Responsibility Information

Health and Safety Performance

TSMC is committed to achieving the highest standards of wellness and safety

for all employees. In the area of wellness, TSMC offers comprehensive wellness

care and employee assistance programs at all of our operating sites. Employees

have access to on-site clinics, 24-hour nursing service, annual physical exams,

women's health services, cancer screening, on-site fitness facilities and programs,

weight management services, and various health awareness programs. Employees

also have access to stress management programs, counseling services, and other

employee assistance programs.

TSMC believes its environmental, safety and health (ESH) practices should

not only meet the relevant local legal requirements, but also benchmark recognized

international practices. The Company's goals are to prevent pollution, efficiently use

all resources, prevent incidents, improve employees' safety and health, protect

property, and establish a work environment that promotes the well-being of our

employees and of the communities in which we operate. In 2005, TSMC continued

its efforts on projects involving Environmental Accounting, Product Life Cycle

Assessment, Green Procurement, Greenhouse Gas Inventory, Contractor

Management, Employees' Health and Avian Influenza Prevention Promotion.

TSMC actively incorporates risk management concepts in the design and

construction of new buildings, the evaluation of ESH requirements for new

processes and for new chemicals in process development. In order to minimize

potential operational losses, the Company regularly evaluates and enhances

electrical and seismic protection during installation of tools and equipment, thus

reducing the risk of interruption of operations.

Regulations

Policies and Procedures Relating to Environmental, Safety and Health


10TSMC believes in equal opportunity employment and values the diversity our staff

contributes toward our corporate culture and our spirit of innovation. Recruitment is

conducted via open selection and is based on the candidate's ability to fulfill the

needs of each position, regardless of race, gender, age, religion, nationality, or

Supplier Selection Process and Criteria Regarding Social and Environmental

Social and Environmental Impacts of TSMC's Outsourced Operations and

Social Responsibility Information

Equal Opportunity Employment

political affiliation.

substances.

In 2005, TSMC continued to follow a green procurement procedure, requesting raw

material suppliers to officially declare that they do not and will not use prohibited

TSMC has promoted a "Responsible Care Program" to assist contractors to

enhance their companies' Environmental, Safety and Health (ESH) management

systems. TSMC collects input from contractors and communicates our expectations

on ESH performance to our contractors annually.

Social and Environmental Impacts of TSMC's Suppliers

TSMC has conducted a "Product Life Cycle Assessment" (Product LCA) for all

6-inch and 8-inch processes, as well as one 12-inch wafer process. The Product

LCA evaluated the environmental impact of these processes, collecting and

analyzing data from the entire chip manufacturing chain, from raw materials

suppliers to finished products, including statistics for such items as energy, raw

materials consumption, and generation of pollutants. The Product LCA study

established an eco-profile and environmental loading values for chip manufacturing.

These can be provided to TSMC's customers upon request.

Contractors

If you have any comments or questions, please contact Y. D. tzeng

Environment, Safety and Hygiene Strategic Planning Department

Tel: 886-3-5672236

Fax: 886-3-5643820

Address: 121, Park Ave. 3, Hsinchu Science Park, Hsinchu, Taiwan 300-77, R.O.C.

E-Mail: [email protected]

E-Mail: [email protected]

Documents

2005 - TSMC · 03 Environmental, Safety and Health annual report 2005 2005 was an encouraging year for TSMC. TSMC not only set the record of continuously making profits for 16 years,